FPL isn’t happy that state regulators have extended rate-hike hearings and delayed a final decision on the $1.3 billion increase until Jan. 11.

As the revised schedule was re-affirmed by the Florida Public Service Commission last Friday, an FPL executive sent the commission a letter saying the utility had the right to unilaterally impose a rate increase on Jan. 4.

FPL’s hike would be subject to refund, based on the final outcome of the PSC vote.

Sheesh, with a one-week difference between Jan. 4 and Jan. 11, you’d think the utility could just chill.

But nope, apparently they just can’t wait to send out those January bills with higher base rates. Happy New Year!

Here’s an excerpt from the Sept. 25 letter sent by R. Wade Litchfield, FPL’s vice president of regulatory affairs:

“Without rate relief FPL’s 2010 return on equity is projected to decline to a grossly inadequate 4.69%…In contrast, putting FPL's proposed rates into effect on January 4, 2010, subject to refund, would give FPL the opportunity to recover the revenues generated by whatever new rates the Commission approves.

At the same time, the provision for refunds would fully protect customers against overpayment: any portion of FPL's proposed rates that was not approved would be fully and promptly refunded to customers, so that their net payment starting on January 4, 2010 would be only the amounts resulting from the Commission-approved rates.”

The gall of these folks is just astonishing.

Take, for instance, Litchfield’s characterization that a 4.69 percent return of equity would be “grossly inadequate.” FPL wants a return in the 12 percent range, which is great for stockholders and executives, not so great for customers.

Many businesses would gladly take five percent profit margins, especially in these times. Especially when that number translates to hundreds of millions in profit annually.

But FPL, as a monopoly with 4.5 million captive customers, considers 4.69 percent “grossly inadequate.”

Litchfield went on to write that the rate-hike delay would “consign FPL to (a) confiscatory result starting at the beginning of January…through no fault of FPL and for no defensible reason. This would be an inequitable, arbitrary and capricious outcome.”

Confiscatory result? According to my dictionary, confiscatory means, “to seize as forfeited to the public treasury.”

In FPL’s world, no increase (i.e., money staying in our pockets) would be tantamount to the government seizing what rightfully belongs to it.

Wow.

To understand the skewed universe FPL lives in, consider that its current base-rate agreement with the state allows the utility to petition for a rate increase any time return on equity drops below 10 percent. And the PSC is supposed to allow for costs that are “reasonable and prudent,” two words that leave huge wiggle room.

Some deal.

No wonder its parent company, FPL Group, keeps painting rosy earnings forecasts. However, one of the “key assumptions” it puts in the fine print for investors is a “continued constructive regulatory framework in Florida.”

I say it’s time regulators get a little deconstructive when it comes to FPL’s profit.

These folks need to be taken down a peg. But I’m not holding my breath.

Comments

Hey Michael -

They aren't called "Florida Plunder and Loot" for no reason. The profit margin they believe they are due is outrageous. No public utility has the right to rip off the people that are forced to use their services. Corporate America appears to have forgotten that you need to manage your business for your customers sake, not the share-holders.

FPL ( Florida Powerful Lords ) They need to be reminded that that are allowed to make money in Florida by the Florida Residents I am getting tried that no one is standing up to FPL People are hurting and it is not the Time to only think of themselves and the Bottom Line for their Stock holders.

FPL is ripping off it's customers. They want to raise rates simply to make a profit. They aren't asking for more money to be able to provide more or better services, just for profit. Hey R. Wade Litchfield - Blowme! Take your 4.69% profit and realize that it is ENOUGH. Maybe take a pay cut so FPL's bottom line looks better you jerkoff.

Wow, Mayo. I didn't know you were such an expert in business finance. The reason they want a higher return on equity is probably so they can attract investor capital at a decent interest rate. Otherwise it costs more in the long run.

"Many businesses would gladly take five percent profit margins, especially in these times."
Not true. Most large corporations wouldn't be in business - even in this recession - if they only got a 5% return or less.

Flippin' PL would 'deserve' a rate increase if they were reliable. With a heavy APC I know exactly how much, how often and when they SLAM me. No way, until they either upgrade the grid and/or become reliable should they even be considered given a raise. I think you are right, they have raised the bill 3 months ago - 2 months in a row. I was gone part of that time and it was way higher!!!! They are not a customer service utility.

FPL should be taken over by the atate,they are a monopoly and they think and beleave they can do what ever they see fit to rob there customers at any time they feel like it,the state needs to take them over and be done with it.

talk about over paid,there linemen make any where from $65.00 an hour to $100.00 an hour and time and a half for over time and double for hoidays and the such depending on how long they have worked for the theives,the meter readers start out at $ 12.00 an hour,office personel start at $ 15.00 an hour,I wish I could make $12 or $15 an hour for doing nothing,its our fault for letting the psc get away with giving fpl what ever they want when ever they want it,the psc has been in fpl back pocket for decades.

The current RoE is about 16%, how is it going to drop that much at the beginning of the year without accounting tricks? Also, FPL raised the dividend paid stockholders last year significantly, why don't they roll back the dividend to the prior year and hold.

If everybody bought a few solar panels for their houses, it would really lower the electric bill. If you got a solor heater for your water tank, it would lower your bill. If people are going to complain about FPL, thats fine. But do something that in the end will help yourself. By the way, as more people buy solar panel, FPL profit #'s goes down, whin in turn only means an increased power bill

Maybe I'm being overly optimistic, but is it possible that the extensive (great) coverage of the FPL rate increase debacle coupled with continued arrests of local politicians for corruption are finally turning the tide? FPL continues to act like the spoiled brat child who always get what they want. What do you mean I can't have my rate increase, I gave you all that campaign money and let you fly on my private jet. WAAAAAHHHH!

In a perfect world, FPL gets nothing and the FBI continues cracking down on our corrupt government. Is there enough momentum for this to happen, where the pendulum finally starts swinging back to the people? I guess we'll begin to find out on Jan 11th.

hey Michael the response you posted by Thomas Saporito - do you think he has a personal vested interest in the PSC denying FPL's rate request? He wants the PSC to order FPL to finance lease-to-own solar systems, so his company can benifit. Isn't he very objective in saying the OPC has made its case against a FPL rate increase?

We are not getting anywhere here in Orlando. The more we save on water and electricity, as they recommend, the less profits they will make, hence they will raise their rates.

We are already conserving more energy than we possibly can; however, our bill is higher than before. This is the same for our water bill.

Not only that, but I also got a letter for my car registration and they raised that as well, which started September 1st.

And, the Florida Kid Care for my children, I just got a letter (a couple of days before the bill was due) that the rate has gone up on that too.

What are we supposed to do when everything keeps going up by 25%-50% and our pay raises are only 2%. Eventually, (well already) our bills are now higher than our income.

My husband has been trying to find a higher paying job (at least he has one), and I had to close my business due to the recession and can't find a job.

All of these services are NEEDED. Therefore, these rates are forced upon us. This is wrong, wrong, wrong.

First of all, a needed service for the people to survive should not be handled by a for-profit private company in an area where there is no competition. Competition is needed to keep companies fair to the customers. However, due to the way electricity is developed it is impossible to have competing companies. Therefore, I propose that this service and other like it are handled by non-profit companies.

What we really need are a group of local people ready to get together and come up with a solution. This group can then take this solution to the government and protest or do what is needed to see it happen.

I have never been an advocate for the government take over of businesses but in FPL's case I would be happy to make an exception.

More and more people are investing in "off grid" technologies to sever their services with utility companies and I am all for it. The sooner affordable home electric generation becomes a reality for everyone the sooner company's like FPL will go the way of the dinosaur. Go to hell FPL, I hope your officers and board members die a horrible death from cancer.

The settlement agreement that FP&L is referring to? It was signed by Atty General Charlie Crist,
OPC Chief Harold McLean,
and AARP Mike Twomey. In essence, FP&L was given this power, as Crist was running for Governor, and the devil's in the details no one read.
This is the Emporer (Crist) with no (moral) clothes. This is your prom king you picked, like Bill Cotterell said in Tally Dem in 2006!
So now, Chair PSC Carter is postponing the "show" for the rate increase til next year, and new commissioners cant be on the docket? HA! Crist has to approve Katrina, or Argenziano that bit the hand that approved her (Crist) gets her to finish smearing him as he runs for US Senator.
Priceless!

The government needs to step in and take over FPL. The prices are outrageous, and FPL seems to be making a profit regardless of anything else going on in the economy. The PSC is a joke, which is why FPL is ignoring them like a lap dog should be ignored.

When does our own government step in to provide some control and relief?

Companies across the globe are finding it necessary to cut costs (salaries, stock options, travel, benefits, etc.) to ensure their profit margins during these difficult times. FPL appears unwilling or unable to do that. The customer and PSC should demand reasonable cost cutting measures, before asking the recession strapped customer to pay for their excesses.

perhaps we should ALL show up at their headquarters - which, might I add is quite a luxurious building / palace...FPL needs to be taken down & out. They just want another jet to fly around in while we all try and figure out how to pay the bills. F - FPL.

you can thank the psc for delaying their decision. they have had plenty of time and should have decided before january. i dont necessarily agree with what fpl is doing but state law allows it. besides customers will only get charged a few dollars more only to have it refunded a couple weeks later. lets not blow it out of proportion here.

AS a former customer of LILCO, I thought I had seen the worst - FP&L makes them (now defunct due to Shoreham) look like saints. There hasn't been major storm damage in Florida since 2005; oil prices have dropped almost 50% from their high 18 months ago and still FP&L wants a rate hike? We already pay an automatic surcharge if oil goes higher and we pay surcharges for storm damages. FP&L risk exposure is practically nil - and yet...their RoE is too low? Fire the management and get someone competent to run the company!!!

The money to generate refunds users have to pay as well as the increase FPL is assessing. What is fair about this situation?
Public Service Commission needs at least 2 public members in order to hear directly from the public. I know the legislature would have to amend the present law to include public members, but it would be well worth it in the grand scheme of things.
FPL is acting totalitarian..........FPL doesn't care about the users, just the almighty dollar!!
Thanks, Mike for staying on top of this hot issue.

I telephoned the PSC to tell them I am against ant rate increase. Last year my electric bill was around $80.00 in the summer this year it is $135.00. I keep my air at 80 degrees. The PSC phone number is 800 342-3552.

Not quite, how much do you figure it will cost them to build and maintain two new nuclear plants? If they finance customer installation of PV panels they don't have a need to build and maintain the new power plants. Plus a distributed generating network has many other benefits as well but it does take a paradigm shift to consider your customers to be your business partners rather than cows to be milked for profit.

Hello clearly works for FPL...I don't even know what to say nothing will happen unless everyone does something a few won't help. Everyone needs to not pay and take some signs and park outside their Million dollar homes...drastic but obviously the government won't step in and do anything...garbage they are politicians and FPL full of garbage

FPL has always done what they wanted to do. They have to be the only company that you can pay a deposit for services and if your bill goes higher or you pay late they add on another deposit. I am a mother of 6 and some months bills are paid late, but i do not think that in a struggling society that if we pay late we should have to pay additional deposit. Late fee i can understand to an extent. Also if you don't pay that additional deposit they will come and cut your services off. Now this is not for non payment of your regular extremely high bill each month. This is extra money they are asking for.
Then they tell you oh, well the deposit is refundable after 23 months of paying on time. Ridiculous, can't stand them.
I was speaking to one of their phone reps and the woman had the nerve to tell me oh well there are other electric companies in South Florida, i asked her where and she told me homestead. If i could have reached through that phone and choked her i would have. So they are telling me if i want to use another company i have to move, if not i have to deal with their high cost and increases. Some one needs to do something, or at least some one show us what we can do to get some change around here. Every where we live some one is getting a bribe to allow crap like this to go on. Frustrated in South Florida.

I think South Florida should demand that we pull the lease from FPL for the public right of ways and form a cooperative electric company owned by its users and take FPL out of the equation. There are many communities around the country exploring similar possibilities to escape the profit mongers trying to please shareholders instead of their captive consumers.

For once, I wish someone would put people instead of business. We are stretched as far as we can go without breaking and they want to add more? I wish I had a 5% profit instead of running in the negative.

Dear Conservation Tips: Consuming less will only result in decreased revenues and further rate hikes. It's a no-win situation for the consumer. The PSC must demand that FPL cut costs and manage their business more efficiently.

Can you blame them? They have the PSC in their pockets. Its not like they are asking a REAL PSC regulator for a hike. They are asking a bunch of PSC sellouts that owes them. That is why the gall.

What I find disheartening is everyone bashing FPL, a capitalist company. No one seem to be questioning their representative on this issue(misdirection is a great tool). The politician have all gone mute. Not a peep from anyone. They are hiding in the bushes waiting for the people anger to abate and past the hike. That is why they are pushing the date further. The politicians know that there's no escape from the hike. They all accepted money from FPL or in the future.

People, do not expect FPL suddenly grow some moral fiber. This will not happen. Remember, we do not elect FPL officials but our representatives. BUT YOU can make a difference in the next elections. NO INCUBENT NEXT ELECTIONS!

I wonder if I ask my boss for a raise in this matter, what would happen to me.

FPL does not use "smart meters". Smart meters offer two way communication, which would eliminate the need for so many meter readers and trucks in neighborhoods, an obvious cost savings. In addition, smart meters immediately let the utility know the location of power outages and allow the customer to track usage on the Internet. I'm sure there are many other solutions that would allow FPL to cut costs without having to raise rates to ensure their inestors' rate of return.

If FPL gave out 1-60 watt CFL light bulb to each of its customers that would save 211 mega watts of needed power. If they gave out 10 CFL light bulbs to each of it's customers that would equal 2,110 mega watts of powers saved equal to the output of the Port Everglades Power plant. At 50 cents a bulb that would cost 22.5 mil average life per bulb 8000 hrs average savings of carbon 150 lbs per year per bulb. Or we could buy the bulbs ourselves and not have a 1.3 billion price hike for what?

I hope the PSC refuses the Rate increase people are moving out of South Florida because of tight Job market and to costly to live in South Florida they should at the very least delay the increase until Florida Recovers.

FPL incentive programs are just another way for them to fatten their wallets at the consumer's expense. These incentive programs and any fees attached should be eliminated in a cost reduction effort to help lower electric bills.

Haven't seen such an unprofessional editorial since perusing archives of "yellow journalism". Keep creating junk like this and be assured you will get no further than no farther than a shot on Deco Drive. Definitely no Pullitzers in your future.

Can you blame them? They have the PSC in their pockets. Its not like they are asking a REAL PSC regulator for a hike. They are asking a bunch of PSC sellouts that owes them. That is why the gall.

What I find disheartening is everyone bashing FPL, a capitalist company. No one seem to be questioning their representative on this issue(misdirection is a great tool). The politician have all gone mute. Not a peep from anyone. They are hiding in the bushes waiting for the people anger to abate and past the hike. That is why they are pushing the date further. The politicians know that there's no escape from the hike. They all accepted money from FPL or in the future.

People, do not expect FPL suddenly grow some moral fiber. This will not happen. Remember, we do not elect FPL officials but our representatives. BUT YOU can make a difference in the next elections. NO INCUBENT NEXT ELECTIONS!

I wonder if I ask my boss for a raise in this matter, what would happen to me.

re:I wonder if I ask my boss for a raise in this matter, what would happen to me.

Anthony, you need to grow some stones and go one step further like FPL...Don't just meekly ask your boss for a raise, go ahead and grant it to yourself before your boss even decides!

As for this utility, they are disgusting and repugnant in my opion! We the consumers should not be forced to deal with them.
We deserve to have a choice of another company for service. Their customer service is bar none the WORST I have ever experienced.

re:I wonder if I ask my boss for a raise in this matter, what would happen to me.

Anthony, you need to grow some stones and go one step further like FPL...Don't just meekly ask your boss for a raise, go ahead and grant it to yourself before your boss even decides!

As for this utility, they are disgusting and repugnant in my opinion! We the consumers should not be forced to deal with them.
We deserve to have a choice of another company for service. Their customer service is bar none the WORST I have ever experienced.

FPL is the leading utility in the nation with respect to alternative energy. They have the largest PV plant in Desoto County producing 25MW of power. They have wind farms and other alternative plants around the country. They are working hard to do what was asked of them by the State of Florida and yet when regulation pushes their agreed upon operating ratios down the State decides to turn their backs on FPL. You must consider that operating a business constantly under the thumb of the State of Florida is not a picnic. Compliance with a multitude of laws, regulations and mandates makes operating and maintaining a health set of books nearly impossible without some intervention by the State to adjust rates to make funding all these mandates possible. Give FPL a break. And no i am not an FPL employee I am a solar energy integrator just telling it like it is.

INCREDIBLE THERE WILL BE MORE FORECLOSURES HAS ANYONE TOLD FPL WE ARE IN A RECESSION AND THE ECONOMY IS IN DEEP TROUBLE.THIS IS THE STRAW THAT WILL BREAK THE CAMELS BACK.HELP!
THIS KEEPS UP AND MORE PEOPLE WILL BE LEAVING FLORIDA.

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About the author

MICHAEL MAYO has been the Sun-Sentinel's Broward news columnist since 2002. He is not a failed sports writer, as some detractors contend, just a lapsed one. He came to South Florida to cover sports in 1989. He now takes aim at everything under the sun. He was born in Brooklyn, went to college in Boston and has also lived in London and Spartanburg, S.C. His hobbies include losing weight (unsuccessfully) and losing golf balls (very successfully).